Anybody Buying Yet? Where’s the Bottom?

[Foxtrot1]

Staffing issues? That has been a common theme in a lot of industries and timber is certainly a tough job. There was significant excess capacity in 2024. Prices reacted accordingly. I'm not a fan of government intervention/assistance, but we have tariffed Canadian lumber for 40 years and it still dominates. They can cut logs cheaper than we can. I also think there is a US government loan program available for mills. The souther pine industry has a lot of large investment funds involved and they run pretty lean. The only real solution is the same with every other industry. Get as big as you can to build scale, squeeze workers wages and try to charge customers more. Anyone who has spent time in a NF will see the previous runs at extracting timber. Change is perpetual. Also, a quick search shows other firms expanding capacity. Very location dependent.

We've lost 6-7 major mills across the region since spring. Both fiber and dimensional lumber sawmills. Pulpmills continue the trend of moving offshore. We haven’t protected the market to try to keep it here, while dimensional lumber imports get tariffs to drive their price up. With the loss of mills and weak demand from the housing market, most mills are restricting how much each logger can deliver to the mills. So they have been running on 60% production for months now. Fuel, insurance, and equipment/parts (from tariffs) costs have also skyrocketed this year.

A regional economic analysis publication estimated cost to cut, skid, and load 1 ton of wood at roughly $19 last year. The avg pay rate was $13.50. All the recent mill closures and fuel increases haven't even had time to take effect on those figures yet.

 

[elkduds]

Can't really say what this means as far as long term implications, but the forest industry is in free fall in the wood basket of the world. Just lost another large mill in the region yesterday. In meetings with dealers, they expect equipment foreclosures to skyrocket in the next 60 days. Everyone always talks about farmers having it tough, but there's usually lots of hand outs to help. The forest industry gets passed over when its time for Uncle Sam to "help". I dont think anyone has a plan to get thru this, they are just standing back and watching the dominos fall.

Despite the dry winter, this snowball is rolling downhill, enlarging with every rotation.

 

[rogerthat]

Seeming like with today’s market action maybe the boy who cried wolf effect is starting to take effect. Better buying opps are on the horizon imo

 

[Gulf of America]

Seeming like with today’s market action maybe the boy who cried wolf effect is starting to take effect. Better buying opps are on the horizon imo

Wouldn't this be more of a "boy who cried sheep"?

 

[Treeshark]

Seeming like with today’s market action maybe the boy who cried wolf effect is starting to take effect. Better buying opps are on the horizon imo

Agreed. I do not get the sense that we are nearing the bottom yet, unfortunately.

Iran is rapidly turning into a quagmire.

 

[SAJ-99]

Seeming like with today’s market action maybe the boy who cried wolf effect is starting to take effect. Better buying opps are on the horizon imo

It appears the Pres is trying to extract himself from the mess he created while declaring victory and Iran won't let him. Almost baiting him into boots on the ground. Market is very nervous because there still is no obvious exit and it is getting less clear every time someone talks. Some flight to quality in shorter treasuries is about the only positive I have seen today. Most everything is oversold. Main risk is a Monday panic, and many asking if people still do that. I guess we will find out. LOL.

 

[elkduds]

Better buying opps are on the horizon imo

CFP speak for "We're toast, in the short term."

 

[406dn]

It appears the Pres is trying to extract himself from the mess he created while declaring victory and Iran won't let him. Almost baiting him into boots on the ground. Market is very nervous because there still is no obvious exit and it is getting less clear every time someone talks. Some flight to quality in shorter treasuries is about the only positive I have seen today. Most everything is oversold. Main risk is a Monday panic, and many asking if people still do that. I guess we will find out. LOL.

I'm afraid you are right. I like seeing the stock for the company I retired from go up, but would by far prefer different circumstances.

 

[BuzzH]

Agreed. I do not get the sense that we are nearing the bottom yet, unfortunately.

Iran is rapidly turning into a quagmire.

I think you meant to say this administration is rapidly turning into a quagmire.

 

[Treeshark]

I think you meant to say this administration is rapidly turning into a quagmire.

I was trying to remain as politically ambiguous as possible.

 

[Straight Arrow]

I was trying to remain as politically ambiguous as possible.

Ambiguity is prudent in this atmosphere of political appropriateness ... else you could get ICED!

 

[SAJ-99]

Reducing risk asset today. Hard to find anything to buy.

SPY is now below the price I sold at in August. Got to collect interest for 6 months and then buy back lower. Valuations are more reasonable now but uncertainty much higher. Good investing to all.

 

[Pucky Freak]

Been quite a while since I updated.

-I advise for my parents. They had enough retirement years (left) to coast out their years on less volatile securities and we decided to jump ship a year ago. Big transition to bonds and income stocks, just before the tariff scare. We went heavy on AI after the 2020 COVID crash and made out well on it, but did miss out on the last 20% or so growth over the last 12 months before the latest peak.

-My personal investments have been heavily titled towards S&P 400 for well over a decade, and I patiently waited to sell high to transition to a more diverse portfolio. I waited too long and missed the AI wave entirely. However, I purchased a
most of my index shares around the $55 mark, and cashed out at $98 in late Jan, so it worked out well. I’m now spread out more evenly across sm cap, med cap, lg cap, REIT, and intl.

-I did specifically carve out the Magnificent Seven d/t my concerns about overvaluation. If there is a major correction on AI stocks anytime in the next 3 years or so, I’ll likely buy up at that time.

 

[homers]

Been quite a while since I updated.

-I advise for my parents. They had enough retirement years (left) to coast out their years on less volatile securities and we decided to jump ship a year ago. Big transition to bonds and income stocks, just before the tariff scare. We went heavy on AI after the 2020 COVID crash and made out well on it, but did miss out on the last 20% or so growth over the last 12 months before the latest peak.

-My personal investments have been heavily titled towards S&P 400 for well over a decade, and I patiently waited to sell high to transition to a more diverse portfolio. I waited too long and missed the AI wave entirely. However, I purchased a
most of my index shares around the $55 mark, and cashed out at $98 in late Jan, so it worked out well. I’m now spread out more evenly across sm cap, med cap, lg cap, REIT, and intl.

-I did specifically carve out the Magnificent Seven d/t my concerns about overvaluation. If there is a major correction on AI stocks anytime in the next 3 years or so, I’ll likely buy up at that time.

How are your parents bonds doing? What bonds do they have and how have been the annual returns like?